Stephen Koukoulas - Housing Finance Data

The extent of the cooling in the housing market will get a further update with the release of the housing finance data for June. Since the peak in the number of new loans in June 2016, housing finance has dipped 4.4 per cent with falls in new lending in three of the past four months. The value of loans has also started to trend lower.

With the banks hiking interest rates for investors and owner-occupiers outside moves in official rates, plus a tightening in credit from APRA and other regulator changes, a softening in new lending seems assured. This downturn in housing is mixed news for the RBA – it is desirable from the point of view of a move to greater financial stability, but at the same time, it undermines the economic growth outlook as the overall housing market looks to track lower.